January 2010

Berin Szoka and I will be in Berkeley, CA tomorrow attending the FTC’s 2nd “Exploring Privacy” roundtable event. The event will take place at the University of California-Berkeley School of Law. Here’s the agenda and speaker bios. The event will be webcast for those who cannot make it. But for those of you who going, make sure to come say hi to Berin and me. We were thinking about trying to get a group together afterward to grab a beer somewhere nearby.

As always, this year’s “State of the Net” conference features a variety of breakout sessions from which to choose and, sadly, until I figure out a way to clone myself, I can’t cover them all. So, I decided to sit in on the panel about “Antitrust in the Internet Era,” since it’s a subject I find of great interest. It featured the following lineup:

At the “State of the Net” conference this morning, Alan Murray of The Wall Street Journal interviewed Brian Roberts, Chairman & CEO of Comcast. Here are some highlights. [You can follow all of my live Tweeting at: @AdamThierer]

I’m attending day 2 of the 2010 “State of the Net” conference today. CDT founder Jerry Berman kicked off the show and, echoing Ithiel de sola Pool, said that the Internet is a “technology of freedom” but that it needs stewardship and protection to thrive. He specifically mentioned how First Amendment protections were vital.

Jerry then introduced Rep. Rick Boucher of the House Commerce Committee and the Co-chair of the Congressional Internet Caucus. Here are some of the highlights: [And you can follow my ongoing live Tweeting from the State of the Net conference @AdamThierer] Continue reading →

OK, time for a quick rant. What is all this confusion and consternation over early termination fees (ETFs) for high-end smartphones? I mean, seriously, how hard is this process to understand? The FCC has worked itself into a lather over this and is bombarding wireless operators and Google with hate mail letters of inquiry harassing asking them about their ETF policies. I just don’t get it. Let’s review some simple realities:

Smartphones — especially high-end devices like the iPhone, the Droid, and the Nexus One — are basically mobile mini computers.

Mini mobile computers do not grow on trees; someone has to make them and sell them at a profit or else no one would offer them to begin with.

But the people who make and sell these devices (and wireless service for these devices) want to ensure rapid, widespread distribution to win over customers and recoup their costs.

So, they offer a classic business inducement — an upfront subsidy for the product in exchange for monthly payments to amortize the upfront “loan” they have given the customer;

AND THEN THEY FORM A CONTRACT WITH THE BUYER TO MAKE THE DEAL WORK. And that contract obligates both sides to live up to their end of the deal.

Hey… did I mention they need to form a contract to make the deal worth it? OK, good, wanted to make sure I got that point across.

Then they give you a nice shiny new mobile mini-computer that for some reason we Americans still insist on calling a cell phone.

Then you start paying off the “loan” they’ve given you for that device over the span of the service contract. This is called “prorating.”

But, if you default on that loan by breaking your contract, you’ll be hit with a penalty — an early termination fee — since it would leave the carrier without a way to recoup the cost of that shiny new mobile mini-computer that they handed you on the cheap when you just absolutely had to have the hot new toy in town.

Is this process really all that complicated? And why is it so controversial? It certainly shouldn’t be. Prorating happens every day in countless ways in a capitalist economy. And yet in the apparent techno-entitlement society we live in these days, some people seem to think there’s something scandalous about this process when it happens with our beloved mobile devices. In reality, the smartphone subsidy and prorated contract system is really one of the great pro-consumer accomplishments of our time. Continue reading →

Panel #2 at this year’s “State of the Net” pre-conference featured a lively debate about net neutrality and investment. It included a debate between Hal Singer of Empiris LLC and Michael Livermore of the New York University Law School. It also featured the comments of Markham Erickson of the Open Internet Coalition and Christopher Yoo of the University of Pennsylvania Law School. The panel was ably moderated by Susan Crawford. Here are some highlights of what proved to be a fun and feisty debate, which began with the comments of Hal Singer:

Hal Singer, Empiris LLC

FCC wants to constrain pricing flexibility for networks

Not clear we need price regulation for service delivery in absence of clear market power

FCC Commissioners Michael Copps and Meredith Attwell Baker kicked off the 2010 Congressional Internet Caucus “State of the Net” conference this afternoon with two brief keynote addresses. Below I’ve summarized the highlights here from my live Tweeting at the event (@AdamThierer):

Commissioner Copps

• “every great challenge this country faces… has a broadband component at its core if it’s going to be successfully dealt with”
• Broadband is the great enabler; Private sector will lead, but national objectives and visionary public policy also have to be at core
• “sins of recent public policy past” got in way of us doing things that needed to get done
• Worries about wider new “divides between us”; have opportunity to close them
• Praises Hillary Clinton’s Internet freedom speech from last week
• Hard to conceptualize the changes that next 5-10 years hold in light of the developments of past 5-10
• Worried about open Internet; “unreasonable discrimination”… doesn’t want to allow “too much latitude” to private operators… says it is threat to “openness” (he never really defines the term, however)
• Passionate views on both sides of Net neutrality debate
• Need big pipes and more spectrum to grow capacity (I certainly agree on that one! But Net neutrality isn’t going to help us much in that regard)
• He fears consolidation
• Says minority and women voices are not getting heard online (he says we should measure it by audience measurements & ad $$ but doesn’t bothering mentioning how much wider the gap was in the old mass media era when none of those voices could get heard at all)
• How do we assure what we’re doing “actually works for democracy” and the “public interest” (but never defines what that means)
• Says media is failing us today; victims are public; investigative journalism is dying (but never discusses how current FCC regulation affects the equation)
• cites Founders (Jefferson, Madison) re importance of media … and then favorably cites McChesney & Nichols new book (ugh, someone needs to tell Commissioner Copps that McChesney is a neo-Marxist who wants to destroy all private media providers!)

Betcha didn’t know that January 28th is Data Privacy Day. That’s the day on which it’s customary to give gifts of cash and money to your favorite privacy advocate. No, not really. Though Hallmark hasn’t gotten a hold of it, it is a day on which some extra attention gets paid to privacy issues.

Like Braden, I also filed comments on the FCC’s inquiry—written by CDT—about what, if anything, the FCC should say about online privacy in the National Broadband Plan Congress assigned the agency to write in the (so-called) “Recovery Act” last year. My comments are available here and are embedded below. Over 20 parties filed comments, available here. My argument in brief is as follows:

To the extent consumer anxiety about online privacy is, as many claim, actually discouraging some Americans from fully utilizing broadband, the FCC could indeed recommend that Congress take action on online privacy—even though the FCC has no jurisdiction to regulate online privacy itself (beyond the limited CPNI rules it has already imposed on the communications services it licenses).

But when Congress charged the FCC with drafting a plan for promoting broadband adoption, it set specific goals: The FCC may only recommend that Congress enact policies the agency concludes on the basis of real data will, on net, help achieve “affordability” and “maximum utilization” of broadband.

The quality and quantity of online services depends on the ability of service providers to collect and use data about web browsing habits to analyze site use, personalize content, tailor advertising, and measure its effectiveness.

So imposing additional regulations on the private sector comes with real costs to users and it’s far from clear that such regulations would, on the whole, promote broadband adoption.

The Commission simply doesn’t have the data to evaluate this trade-off,, nor the time to collect it (as the FTC is trying to do) since the National Broadband Plan is due to Congress in a matter of weeks.

But no such trade-offs exist with regards to government access to consumer data, which creates far more demonstrable and serious consumer harms. So the Commission should limit its legislative recommendations on privacy to endorsing enhanced limitations on government access, such as CDT has proposed.

The Commission should be particularly wary of opinion polls as evidence of consumer expectations because they cannot tell us about the trade-offs inherent in the real world.

Overheated rhetoric around information policy and intellectual property damages the quality of the debate. In this paper, featured speaker and Syracuse University information studies professor Milton Mueller warns against pouring these debates into old ideological molds. Doing so preserves controversy rather than fostering the discovery of common ground. (Or “commons” ground—couldn’t help it!)

I don’t know that this forum will solve the problem, but I know it will be interesting. The sign-up page indicates that the event will be streamed.